Street signs: Buy the dips, sell rallies, HNIs look to break even & more

Buy the dips, sell the rallies

The market trend continues to remain positive, however, expensive valuations limit the near-term upside, say, analysts. They believe traders can make money in the current environment by going out and buying whenever the market falls. Later, sell whenever stocks rally and wait for corrections to re-enter. 

“We are of the view that the short-term trading setup is positive and the ideal strategy would be to buy on dips and sell on rallies. In the near future, the 16,400-16,320 levels would act as a key support zone for the Nifty. If the index manages to trade above these levels, the uptrend momentum could persist up to 16,600-16,750 levels,” says Shrikant Chouhan, executive vice-president, Equity Technical Research, Kotak Securities. On the downside, a fall below 16,320 could drag the market to 16,150-16,000 levels, he adds. The Nifty on Friday closed at 16,529.

HNIs look to break even

High net-worth individuals (HNIs) have incurred heavy losses on the previous two listings —Glenmark Life Science and Rolex Rings. They are hoping for a better outcome in the four listings that will take place this week. “While the grey market premiums have come off, HNIs still seem to be in-the-money. One has to see how the actual listings take place,” said a primary market expert. He said, after suffering losses, HNIs have scaled back on their bets. Besides Devyani International and Krsnaa 

Diagnostics, all other recent IPOs saw lukewarm responses from investors, who place bets on borrowed funds.

Basket trade in Hindalco, JSPL, Ipru 

Domestic brokerage IIFL is recommending its clients to buy Hindalco, Jindal Steel & Power (JSPL), and ICICI Prudential Life Insurance Company (Ipru) as basket trade citing positive momentum. “We recommend a momentum long basket comprising Hindalco, JSPL and Ipru for a seven per cent gain. We will suggest placing the stop loss at 3.5 per cent at the basket level. The trade is based on our proprietary momentum framework as scores in these stocks have been pretty strong recently,” said Sriram Velayudhan, vice-president (Alternative Research), IIFL-Institutional Equities in a note.